Family ownership and the debt policy of Moroccan listed firms: The moderating role of board independence

This article examines how board independence moderates the relationship between family ownership and debt policy using panel data analysis. The results show that family firms exhibit higher debt levels compared to non-family firms, suggesting thereby that their financing behavior is driven by socioemotional wealth (SEW) considerations insofar as family shareholders are likely to use more debt to preserve family control over the firm. Additionally, the study shows that independent directors mitigate the positive effect of family ownership on debt financing, revealing that board independence is an effective governance mechanism that safeguards non-family and minority shareholders' interests and monitors family shareholders' behavior. Overall, the study offers valuable managerial insights, highlighting the crucial role of independent directors in reducing potential agency conflicts, protecting shareholders' interests, and promoting improved governance and professionalization within family firms.